ACIT, New Delhi V. Shri Khushi Ram Bhatnagar, New Delhi

ITA 2676/DEL/2012

• Counselvise Citation: 267620114 RSA 2012
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHASHI BHUSHAN SHUKLA SENIOR
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.K. GUPTA, JUDICIAL MEMEBR AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2676/DEL./2012 (ASSESSMENT YEAR : 2008-09) ACIT, CIRCLE 34 (1), VS. SHRI KHUSHI RAM BHATNAGA R, NEW DELHI. 1/3156, RAM NAGAR, MANDOLI ROAD, SHAHDARA, DELHI 110 032. (PAN : ACSPB6125D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ALOK GUPTA, CA REVENUE BY : SHRI SHASHI BHUSHAN SHUKLA, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF THE CIT (APPEALS)-XXVII, NEW DELHI DATED 07.02.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE IS AN INDIVIDUAL. THE RETURN OF IN COME WAS FILED ON 31.07.2008 DECLARING INCOME AT RS.22,00,520/-. DUR ING THE YEAR, THE ASSESSEE HAS SOLD FOUR RESIDENTIAL PLOTS SITUATED A T BEHTA HAZI PUR, LONI, GHAZIABAD (U.P.). THE FULL VALUE OF THE CONSIDERAT ION DECLARED BY THE ASSESSEE FOR THESE FOUR PLOTS WAS RS.19 LACS. AS P ER ASSESSING OFFICER, THESE SALES WERE THROUGH AGREEMENT TO SELL AND THES E AGREEMENTS WERE NOT ITA NO.2676/DEL/2012 2 REGISTERED WITH REGISTRAR / SUB-REGISTRAR OFFICER. THE ASSESSING OFFICER INVESTIGATED THE ISSUE AND ON THE BASIS OF CIRCLE R ATE FOR STAMP DUTY VALUATION, THE VALUE WAS TAKEN AT RS.1,17,74,701/- AND ASSESSMENT WAS FINALIZED. THE CIT (A) HAS GRANTED THE RELIEF. NO W, THE REVENUE IS IN APPEAL BY TAKING THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE EVEN WHEN THE APPELLANT DID NOT SATISFY THE CONDITIONS LAID DOWN IN RULE 46A OF THE I.T.RULES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO REFER THE VALUA TION OF THE PROPERTIES TO THE DVO AND TO CALCULATE THE CAPITAL GAINS AS PER PROVISIONS OF SUB-SECTION 3 OF SECTION SOC EVEN WHE N THE APPELLANT FAILED TO ESTABLISH BEFORE THE AO THAT TH E VALUATION BY THE STAMP VALUATION AUTHORITY EXCEEDED THE FAIR MARKET VALUES OF THE PROPERTIES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO REFER THE VALUA TION OF PROPERTIES TO THE DVO AND TO CALCULATE THE CAPITAL GAINS AS PER PROVISIONS OF SUB-SECTION 3 OF SECTION SOC WHEN SUC H A DIRECTION TANTAMOUNT TO SETTING ASIDE THE ASSESSMENT THEREBY THE LD. CIT(A) EXERCISED POWER WHICH WAS NOT VESTED IN HIM. 4. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEA L AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THE ISSUE INVOLVED IN GROUND NO.1 IS ADMITTING THE ADDITIONAL EVIDENCES B Y THE CIT (A). THE REVENUE CLAIMS THAT CONDITIONS LAID DOWN UNDER RULE 46A WERE NOT FULFILLED, THEREFORE, THE CIT (A) SHOULD NOT HAVE A DMITTED THE ADDITIONAL EVIDENCES. FROM THE RECORDS, WE FIND THAT THE ASSE SSEE HAS SUBMITTED THE FOLLOWING ADDITIONAL EVIDENCES :- ITA NO.2676/DEL/2012 3 I. COPIES OF SALE DEEDS IN RESPECT OF FOUR PROPERT IES DULY EXECUTED BY THE APPELLANT AND REGISTERED WITH THE S UB- REGISTRAR. II. COPIES OF SALE DEEDS OF FIVE PROPERTIES IN THE SAME LOCALITY EXECUTED BY OTHERS AND REGISTERED WITH SUB-REGISTRA R. III. THE APPELLANT REQUESTED THAT HE WAS NOT GIVEN SUFFICIENT OPPORTUNITY TO ADDUCE ADDITIONAL EVIDENCE RELEVANT TO THE ISSUES INVOLVED IN THE CASE AND REQUESTED FOR ADMIS SION OF THIS ADDITIONAL EVIDENCE AS THE SAME WAS RELEVANT A ND MATERIAL FOR DECIDING THE ISSUES UNDER APPEAL. THE CIT (A) HAS ADMITTED THE EVIDENCES BY HOLDING A S UNDER :- 15. I HAVE CAREFULLY CONSIDERED THE APPELLANT'S S UBMISSIONS AND THE AO'S OBSERVATIONS IN THE ASSESSMENT ORDER AND T HE REMAND REPORT. I FIND THAT SHOW CAUSE NOTICE TO THE APPELL ANT WAS ISSUED ON 22.11.2010 TO WHICH THE APPELLANT FILED HIS REPLY O N 24.11.2010. THEREFORE, THE APPELLANT DID NOT HAVE SUFFICIENT TI ME TO COLLECT NECESSARY DOCUMENTARY EVIDENCE IN THE FORM OF SALE DEEDS OF OTHER COMPARABLE PROPERTIES IN THE AREA IN SUPPORT OF HIS CONTENTIONS. THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT IS, THEREFORE, ADMITTED IN TERMS OF CLAUSE (C) & (D) OF THE RULE 4 6A(1) AS IT IS RELEVANT TO THE DECISION OF THE ISSUES INVOLVED IN THE APPEAL. AFTER HEARING BOTH THE SIDES, WE AGREE WITH THE CIT (A) AND THE CIT (A) WAS JUSTIFIED IN ADMITTING ADDITIONAL EVIDENCES, TH EREFORE, WE DISMISS THIS GROUND OF REVENUES APPEAL. 4. IN THE GROUND NO.2, THE REVENUE HAS RAISED THE I SSUE THAT THE CIT (A) IS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFF ICER TO REFER THE PROPERTIES FOR VALUATION TO DISTRICT VALUATION OFFI CER (DVO) AND THEN TO CALCULATE THE CAPITAL GAINS AS PER THE PROVISIONS O F SUB-SECTION (3) OF SECTION 50C OF THE INCOME-TAX ACT, 1961 AND THE REV ENUE HAS ALSO OBJECTED THE SETTING ASIDE THE ASSESSMENT BY PLEADI NG THAT THE CIT (A) HAS NO POWER FOR DOING SO IN GROUND NO.3. ITA NO.2676/DEL/2012 4 5. WE HAVE HEARD BOTH THE SIDES ON BOTH THESE GROUN DS. THE ASSESSEE HAS REQUESTED THE ASSESSING OFFICER TO REFER THE MA TTER FOR WORKING OUT THE FAIR MARKET VALUE TO BE DETERMINED BY DVO WHICH THE ASSESSING OFFICER HAS NOT DONE. THE PROVISIONS OF SECTION 50 C PROVIDE THAT WHEN THE VALUE DETERMINED BY THE DVO IS LESS THAN THE VA LUE ASSESSED BY THE STAMP VALUATION AUTHORITY, THEN THE SAME HAS TO BE ADOPTED FOR THE PURPOSES OF SECTION 50C OF THE ACT. SINCE THE ASSE SSEE HAS BEEN PROVIDED THIS PRIVILEGE IN THE ACT ITSELF, IN OUR CONSIDERED VIEW, THE CIT (A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO REF ER THE PROPERTIES FOR VALUATION TO THE DVO IN TERMS OF THE PROVISIONS OF SECTION 50C(2) OF THE INCOME-TAX ACT, 1961. CIT (A) IS ALSO JUSTIFIED IN DIRECTING TO RECALCULATE CAPITAL GAIN AS PER THE PROVISIONS OF SUB-SECTION ( 3) OF SECTION 50C OF THE ACT. KEEPING THESE FACTS IN VIEW, WE SUSTAIN THE O RDER OF THE CIT (A) ON THESE GROUNDS AND DISMISS REVENUES GROUND NO.2 & 3 . 6. GROUND NO.4 IS GENERAL IN NATURE AND DOES NOT RE QUIRE ANY ADJUDICATION, HENCE, DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 9 TH DAY OF AUGUST, 2012. SD/- SD/- (R.K. GUPTA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 9 TH DAY OF AUGUST, 2012 TS ITA NO.2676/DEL/2012 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI